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Research Highlights 2010: Agricultural and Rural Development

Over three-quarters of the world’s poor live in rural areas with the majority depending on agriculture for their livelihoods. Improving outcomes for the rural poor depends on increasing agricultural productivity, linking better to markets, improving rural infrastructure, and facilitating off-farm employment.

Themes

Research on agriculture and rural development supports the World Bank’s goal of achieving food security and meeting the growing global demand for food. Specific research themes include promoting agricultural productivity; investigating the effects of land policies on farm incomes; improving rural infrastructure; understanding the impact of agricultural price distortions on food prices and their volatility, and interactions between agriculture and the environment; and ways the poor might benefit from nonfarm growth and community-driven development.

Highlights

Connecting the dots between trade, vulnerable places, and vulnerable people

Does international trade lead to higher incomes and better environmental protection, or does it do the opposite, leaving people and ecologies poorer? The answer may depend on how policies are carried out on the ground. Drawing on six case studies set in places where poor households rely on important ecologies, the book traces how global trade affects local livelihoods and the natural resources that the poor depend on, and how local conditions and traditions influence trade's impact on vulnerable places and people. The book explores the links between protecting the environment and lifting people out of poverty. The lessons drawn provide a critical first step in the design of policies to promote development that is truly sustainable.[1]

Annual Bank Conference on Land Policy and Administration

A two-day conference brought together more than 350 policy makers, researchers and representatives from civil society, the private sector, and development partners to explore evidence on large-scale land acquisition, land governance, and research and capacity building. The conference illustrated the potential benefits from recently increased interest in land-related investment. The conference generated strong consensus on the benefits of initiating broad-based policy dialogue on land issues and of the importance of in-depth, evidence-based assessments of land governance at the country level. Research papers, many by developing country scholars, highlighted the far-reaching importance of land and associated property rights for equity- and efficiency-enhancing interventions.[2]

Informal enforcement mechanisms can play an important role in protecting women

In traditional rural settings where there is a high premium on female virginity, women’s legal rights are weak, divorce is strongly stigmatized, women’s economic opportunities are limited, and husbands can wield considerable power within marriage. The widespread custom of watta satta, or bride exchange between families, appears to have evolved to help deal with costs resulting from this power imbalance. Data from the two most populous provinces in Pakistan, Punjab and Sindh, show that the mutual threat of retaliation inherent in watta satta substantially reduces the likelihood of marital estrangement, domestic abuse, and depression among married women. These findings show how informal enforcement mechanisms can sometimes fill gaps left by a weak legal system and limited ability to hold partners to prior commitments.[3]

Africa’s rice sector must be matched by productivity gains in other crops

Rice has become an increasingly important part of African diets and imports of rice have grown. Agronomists point out that large areas in Africa are well suited for rice. A review of the recent literature on rice technologies and their impact on productivity, incomes, and poverty, suggests that a rice revolution has already begun in Africa. Many of the same practices that have proved successful in Asia and in Africa can be applied where yields are currently low. At the same time, Africa’s rice revolution continues to be characterized by a mosaic of successes, situated where the conditions are right for new technologies to take hold. Because diets, markets, and geography are heterogeneous in Africa, the successful transformation of the rice sector will have to be matched by productivity gains in other crops to fully launch Africa’s Green Revolution.[4]

Strengthened social safety nets may avert impacts of price shocks in agriculture

The recent financial crisis affected developing countries through higher interest rates; sharp changes in commodity prices; and reductions in investment, trade, migration and remittances. For most low-income countries, shocks that affect food prices or wage rates for unskilled workers seem likely to have the largest impact on poverty, with declines in key food prices helping to reduce poverty, while declining trade, investment, and remittance flows have had adverse impacts on the poor. Policies to address the crisis must include measures to deal with financial sector problems, the resulting reductions in aggregate demand, and the particular vulnerabilities of poor people. Given the complexity of the impacts from financial crises and commodity price shocks, a strong case can be made for developing better social safety net policies to offset the adverse impacts of a wide range of different shocks on poor people.[5]

Land market restrictions reduce rural wages

Restrictions on land tenure tend to reduce returns to rural labor by raising the cost of moving, but estimating the size of these effects is particularly difficult. This study exploits the effects of historical malaria prevalence on the incidence of land restrictions in Sri Lanka to obtain reliable estimates of the effects of these restrictions. During the 16th to early 20th century, areas severely affected by malaria were abandoned, then taken over by the government, and distributed through resettlement programs subject to restrictions on sale, rental, and mortgage. The results show no perceptible effects of land restrictions on wages in areas close to or far away from the urban center, but land restrictions have strong negative effect on wages in the intermediate zone.[6]

Evaluating an ultra-poor microfinance project in Bangladesh

The PRIME program was introduced in Bangladesh in 2006 to address concerns that regular microfinance does not adequately address seasonality and hard-core poverty. Unlike regular microfinance, PRIME targets the ultra-poor, many of whom are also seasonally poor. Besides providing loans, PRIME offers extension and training services. A quasi-experimental survey design was used to evaluate PRIME against regular microfinance programs. The results show that PRIME is more effective than regular microfinance in reaching the ultra-poor, as well as the seasonal poor, and reducing seasonal deprivation and extreme poverty.[7]